Massachusetts should increase spending on law enforcement and establish harsher penalties to cut down on illegal cigarette sales, according to a new report by Massachusetts Department of Revenue.
A state commission convened in 2013 to study ways to cut down on tobacco smuggling released its final report on Sunday. It did not recommend reducing the state’s cigarette tax, which is the second-highest in the nation, but suggested the state could save money by giving law enforcement agencies more money and threaten smugglers and retailers with harsher penalties.
The commission made twelve recommendations, including confiscating lottery licenses from retailers who buy illegal cigarettes, banning stores from using cash to buy cigarettes from wholesalers, and increasing the level of scrutiny on retailers and their wholesale cigarette purchases. Three recommendations in the 30-page document concerned increasing funding for law enforcement or forming a joint task force of cigarette trafficking.
Economists with the Department of Revenue estimate that cigarette smuggling is big business in Massachusetts, with between 8 and 28 percent of cigarettes smoked here being shipped in from low-tax states like New Hampshire or Virginia. At the high end of that range, smuggling cuts state revenue by $246 million. One independent estimate from 2011 suggested the percentage of illegal cigarettes sold was as high as 40 percent in Boston.